Since Michael Hislop took the chief executive role at Corner Bakery Cafe in 2006, the chain has become a formidable player in the fast-casual bakery-cafe space, posting nearly $300 million in U.S. systemwide sales in fiscal 2012, up nearly 14 percent over the previous year.
Hislop has also led Corner Bakery’s evolution from a primarily company-owned chain into a franchise-driven growth vehicle, helping to build its size from fewer than 100 units to nearly 150 locations in 14 states and Washington. Today, Corner Bakery has set its sights on doubling its number of units by 2015.
Having a conversation with Don Fox, chief executive of Firehouse of America LLC, Hislop spoke first and foremost about the importance of surrounding yourself with great people in order to grow. Fox won a Golden Chain Award in 2011. An excerpt from their conversation follows:
Don Fox: Looking back at the brands you’ve worked with, … were there any key lessons you took away from those early years?
Michael Hislop: I think culture is huge, and when you’re building a brand in the early stages, building that culture is really exciting. I pay attention early on in building that culture with people — everyone understanding their role in driving sales and making money and ultimately being a culture that can grow. … Obviously, a brand needs a great economic model, but early on, [culture] is important to me. … I’ve always enjoyed developing people. … At Corner Bakery today, we have what we call the Weekly Meet that recognizes hourlies and managers for things that they’ve done beyond the call, for ‘wowing’ guests, for doing special things. It’s creating a culture of recognition, a culture where people love to work there.
DF: When you look back at 2006 when you took the reins, and I imagine sized up that culture in advance of your involvement, how, if at all, has [that culture] evolved, and what role have you played in that?
MH: I really believe that points of differentiation for a brand drive frequency. … The big point of differentiation [for Corner Bakery] is through the food. It started with Richard Melman, and he’s food-centric, [and] I am a food fanatic. … The key to Corner Bakery is that open flame — it’s a real kitchen, there’s a real flame in there. … We bake, we sauté and we grill all day long, and the guests know it. … I [also] think we have the best neighborhood marketing programs in the industry. … We know where the schools are, where the soccer teams are; we become part of the chambers of commerce. … We really try to become part of the fabric of the communities.
DF: I’ve had great experiences at your restaurants and was delighted to read about you coming a bit closer to where we’re based in Jacksonville, Fla., with a franchise deal. With that in mind, your brand has shifted gears and started to move from predominately a company-store model to increasingly a franchised one. Can you talk about what that change has meant?
MH: When you decide to become a franchise organization, it is definitely a cultural shift because, all of a sudden, we’re going to now support other people coming in. … That’s a whole new mind set. … You need to make sure you’re crystal clear that there is a transition going on here. … It’s [also] a huge financial investment when, all of a sudden, you’re going to have franchise sales people, real estate people. Different franchisees need different things — they might need accounting, might need marketing, may need operations, design — and we need to have all of that support. … You’re also dealing with all these different CEOs, some with a business bigger than mine. It’s been really a great experience [for me]. … My biggest job is now choosing the right franchise partners.
DF: You’re also a Roark Capital company. … Have you found that to be advantageous?
MH: For me, we were just getting into franchise sales, and they were in it in most of their companies. … When we were looking at them, I wanted to bring in a partner that doesn’t have just the financial expertise, which by the way they do, I wanted to have someone that can come in and talk to me about the kind of support you need when you’re going to … double the size of the company over a three- to five-year period. … Roark knew exactly what was needed, they knew the metrics, … and they have been unbelievable.
DF: When you look back to your earliest days in the industry, is there anything that stands out as having changed most significantly, and on the flip side, what things stand out as constants over 30 years?
MH: I’ve been doing this since I was 16, and in the early days, it was really an exciting business. I remember going in and running my first [T.G.I.] Friday’s, and you worry about getting the right people getting it open, [and] the communities you were in were really excited to have the restaurants opening. … [Today], legislation and government intervention have made it difficult when you’re trying to open up restaurants in different cities. … It has become very, very difficult, even if you have a great brand and great economic model, to make money.
I think the other thing that’s changed is the technology, and that continues to change every three, six, 12 months. … Everyone is moving toward mobile apps and social media, and for us that somewhat levels the playing field. … It’s very different and exciting; you can compete with the big boys. … Every morning, there is an amazing amount of feedback for our restaurant managers, positive and negative, and your ability to connect with the guest in real time is truly amazing.
What hasn’t changed? I think we can do the same meetings we did 30 years ago. … I talk about people and how we needed to have great people and make sure they were trained and educated. … That has been my philosophy from day one, and that hasn’t changed. It’s always been about getting the right people that honestly care about people coming in. And you can tell — we have pretty good filters, Don, after this many years — and you can tell early on which person honestly cares about pleasing people or pleasing other people they are working with. …
I can’t believe I was just doing a “people, sales, profit and growth” lecture to my [area directors] today, as I did 30 years ago.
Don Fox leads Firehouse of America LLC, parent to the Firehouse Subs chain. He started his career at the brand in 2003 as director of franchise compliance. Fox was honored with a Golden Chain Award in 2011, when he was also voted Operator of the Year.